An e-invoice, or electronic invoice, is a digital document that is exchanged between a supplier and buyer and validated by the government tax portal. E-invoicing is the proposed system, digitally prepared in an e-invoicing format and authenticated by the Goods and Services Tax Network (GSTN). This system ensures that a common format is followed by all businesses before reporting invoices to the GST portal.
With E-Invoicing businesses can receive invoices in any format from different suppliers, including image-based invoices. Electronic invoicing provides a single platform for managing all sales invoices, payments & other processes. Business users can easily access, sync, and combine information between various systems and devices, with no duplicacy of bills. E-invoicing is important in helping organizations streamline their invoice creation process, saving time by reducing human errors, inaccuracy of information, and tracking payments manually. Implementing it ultimately results in a much faster process & turnaround time. Enabling the administrator to leave behind tasks that are often repetitive and time-consuming by nature makes room for strategic tasks that add value.
Electronic invoicing uniquely improves visibility into invoices, purchase orders, payments, returns, orders and other contracts. It tracks invoices and provides detailed audit trails. All of the functionality is available through an end-to-end mobile e-invoicing application.
You can ensure accuracy due to improved visibility and end-to-end tracking of invoices. You can also track other orders, approvals, and payment in real-time. This significantly reduces the errors and issues, ensuring no more accuracy issues. E-Invoicing is thus an important factor for enabling a closed audit trail to simplify tracking and settlement. By minimizing manual input and increasing automation, mistakes and typos are reduced. You don’t have to worry about your invoice getting lost in the mail.
Greater visibility into trade and transactions also means a reduced risk of invoice fraud, human error, duplication, oversight, etc. Businesses can save countless hours and resources in time taken for cross verification and due diligence when an efficient system is in place that does not leave much scope for such risks to enter the processing cycle.If you use online invoicing software, everything is saved on one platform which is accessible from anywhere on any device. Get an overview of your invoicing through automated reports and analytics. For example, the PayO invoicing software for small businesses gives you real-time insights into your finances and cash flow
From a buyer’s perspective, e-invoices reduce the risk of fraudulent bills. The authenticity of e-invoices is automatically validated.
Although there are many ways to benefit from online e-invoicing, there are also some limitations to it.
Although the move to a new system is exciting, there are some challenges. For starters, in a country like India, although internet coverage has improved significantly during the last decade, many parts of India continue to suffer from lack of infrastructure. For instance, for an MSME with a factory at a remote location grappling with poor network connectivity, e-invoicing may appear to be a compliance hassle
There are several different e-invoice formats. When sending e-invoices, the sender and receiver must use compatible file formats. Countries often have a domestically standardized format. However, especially cross-border invoicing processes can be complicated by non standardized format issues.
Another problem for cross-border transactions is the varying legislation in different countries. But, this issue is to some extent fading out as the countries are considering joint efforts in standardizing.
While e-invoicing frees a lot of time to do other productive things, it might not be as completely free as sending a PDF through email. If your invoicing volumes are a bit larger, software solutions often charge per invoice sent or have a monthly usage fee. Paper invoicing is by far costlier though.
It might not be possible to get all your stakeholders to use e-invoices. But, eventually, all businesses would consider accepting both traditional and e-invoices.
Large organizations, who have implemented auto generation of the e-waybill on creation of the tax invoice, have to change their existing process. Now they have to interface their system with the IRP portal rather than the e-waybill portal so that IRN(Invoice reference number) is issued. Also changes have to be done to their software to capture the IRN number in the database
Electronic invoicing is increasingly utilized across the globe every day. Services and standards are constantly developed and improved. Many of the problems are therefore likely to be resolved. Anyhow, the benefits clearly outnumber the disadvantages. Electronic, online invoicing saves time throughout the invoicing process. Start e-invoicing now!